Stocks Crushed as Wall Street Girds for Fiscal Cliff Battle

NEW YORK ( TheStreet) -- The major U.S. stock averages were walloped Wednesday, dragged lower by persistent worries about the fiscal cliff.

The selling accelerated after President Barack Obama again stressed his commitment to ending Bush-era tax cuts for the wealthiest Americans during a press conference. The president's firm stance sets the stage for a tough battle with Republicans toward compromise on the next federal budget.

The release of the minutes of latest Federal Reserve policy meeting was a factor as well as the commentary showed some division among members of the central bank's open market committee about continued quantitative easing efforts in 2013.

The Dow Jones Industrial Average closed down more than 185 points, or 1.45%, at 12,571. The blue-chip index, which has now lost ground in five of the past six sessions, is now up just 2.89% year-to-date.

The index, which scraped a session low of 12,542, has pulled back roughly 8% since hitting its 2012 intraday high of 13,661 on Oct. 5.

Breadth within the Dow was very negative with losers far outpacing winners, 29 to 1.

The biggest percentage decliners -- all down more than 2% -- were Boeing(BA) , Bank of America (BAC) , Caterpillar(CAT) , General Electric (GE) , Home Depot (HD) , and United Technologies (UTX) .

Cisco was the only blue chip to finish in the green after the networking giant posted strong quarterly earnings after Tuesday's close. The stock added nearly 5%.

The S&P 500 finished off more than 19 points, or 1.39%, at 1355, while the Nasdaq lost a little more than 37 points, or 1.29%, to settle at 2847.

Both indices are still up so far in 2012, 7.78% and 9.28%, respectively. Since hitting a high of 3197 on Sept. 21, the Nasdaq has now lost 11%, qualifying as a correction. The S&P 500 has fallen 8.1% since peaking for the year at 1474.51 on Sept. 15.

All sectors in the broader market were in the red, with basic materials, capital goods, conglomerates, consumer cyclicals and transportation posting the biggest declines.

Decliners outnumbered advancers by a nearly 9-to-1 ratio on the New York Stock Exchange and 4-to-1 ratio on the Nasdaq. Volume totaled 4.09 billion on the Big Board and 2.10 billion on the Nasdaq.

"With the majority of earnings reports in (approximately 70% better than expected) and the elections complete the equity markets are searching hard for direction and the fiscal cliff is clearly the major concern of the moment and the main driver," said Mike Boyle, a senior vice president at Advisors Asset Management. "Given this we would look for the S&P 500 to tack between 1350 and 1430 through year-end as the fiscal cliff negotiations heat up, but we fully expect the cliff to be averted and the S&P 500 to post a double digit return for 2012 and again in 2013."